[AdmSmith]

Either way however, a 'transaction tax' wouldn't lower volatility, and in fact might actually amplify it.

Yes, and you may take an example from geology: The larger the friction ("transaction cost") between tectonic plates the larger the magnitude of the earthquakes.

[expat_panama]

It's like what Mark Steyn was saying-- 'the biggest cause of problems is solutions'.   Other examples is the mandatory 'cooling off' periods during big price swings, and the regulatory clamp-down on day traders.   Spare me the deeds of them with good intentions!